In January this year, Apple CEO Tim Cook cited several reasons why iPhone sales were not picking up in emerging markets — including in India — with customers holding onto their old iPhones a bit longer, weaker macroeconomic conditions, foreign exchange, and battery exchange programs.
As the year ends, Apple’s market share and presence in India has undergone a complete change, and all of the above reasons for weak growth have somehow magically disappeared.
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The Cupertino-based tech giant is fast selling almost all products — iPhones, Apple Watch, Mac desktops, and AirPods Pro — apart from a growing Apple TV community in India.
The growth is coming even though the economic downturn has crippled several industries, and people haven’t suddenly discovered more money to spend on premium smartphones and other devices.
The reason lies in a better understanding of a market that requires unique customer strategies and mind games, not seen in other, more evolved smartphone territories.
According to industry experts, fuelled by attractive price drops on previous-generation iPhone models, especially iPhone XR, 7, and 8, Apple has been able to pen a new India growth story.
“Together, these (iPhone XR, 7 and 8) accounted for more than 70 percent of shipments for Apple in the third quarter (July-September period) of 2019. Online sales festivals made a larger impact with attractive cash backs on cards, buybacks, and affordability schemes like No-cost EMI. Online channels accounted for almost 40 percent of Apple shipments in 3Q19,” Upasana Joshi, Associate Research Manager, Client Devices, IDC India, told IANS.
Owing to the price cut, the average selling point (ASP) for Apple stood at $729 (nearly ₹52,000) in the third quarter, lower than the previous quarters.
The new lineup of iPhone 11/Pro series has further added to the growth momentum, especially the iPhone 11 with ASP less than $850 (approx ₹61,000) as compared to the higher variant of Pro and Max.
“The opening quarter shipments for the new iPhone 11/Pro series has had a good reception, together accounting for 23 percent of Apple shipments in 3Q19,” Joshi informed.
Apple topped the premium smartphone segment by garnering a massive 51.3% share in the ₹35,000 and above price segment in the third quarter.
Apple regained top position in the premium segment in India in the second quarter with an overall share of 41.2%.
Not just iPhones, Apple Watch, is witnessing a high adoption among its Indian fans.
According to Joshi, Series 5 watch that is essentially an upgrade to the Series 4 at a similar price point will see more considerable traction in the coming quarters, as Apple phases out the Series 4.
“The previous generation model continues to drive majority volumes with an attractive price drop on Series 3 GPS (now starting at ₹20,900) during the festive quarter. We expect this momentum to continue in the coming few quarters,” she told IANS.
Apple has positioned the Watch series on health and awareness that has resulted in its uptake in India.
Joshi said that the entry-level in the premium segment and the planned positioning with the Series 3 in the Series 5 would entice Apple enthusiasts to switch between the two as per the usage and demand.
Another product category — the Mac desktop — helped Apple to record growth in the India market in the July-September period. The newly arrived ‘in-ear’ wireless AirPods Pro with active noise cancellation and immersive sound technology are selling like hotcakes.
India has been a significant market for Cook in the long term, and next on its list are retail stores and local manufactures of high-end smartphones. Things are moving forward on this front — the iPhone XR is being manufactured at the Apple supplier Foxconn facility in Sriperumbudur, Chennai, and the supplier Vistron at the iPhone 7 and 6S Bangalore.
For the coming quarters, Joshi said, Apple should continue to focus more on the $ 700- $ 850 (₹ 50,000- ₹ 61,000) segment, as it is the sweet spot for iPhones in India, including making the new model a bit more affordable. Attractive offers have been added, however, for volume growth to continue to focus on older generation portfolios.
Apple knows this well and is poised to bring more aspiring Indians to its ecosystem in 2020, with an aggressive market outlook while continuing with price drops and attractive offers.
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